MSE News: Government continues simple financial products crusade

davidgmmafan

"This exercise does seem like the Government wants to appear to be doing something without actually doing anything. This way, they can appease the public without upsetting their precious, money spinning, financial institutions."

See Energy summit where they did exactly that in another area...

I think they could start with current account charges when a payment is returned unpaid, or someone goes over their limit. Instead of loads of different offerings saying if this then we charge X, if this we charge Y, and by the way we have you over a barrel because the charges are applied to the account they should make the referral to the competition commission promised by Mr Cameron in opposition.

They can start by investigating how, in a competitive market, the charges were so uniform, why it was ok for the banks to lie by saying the charges merely covered the cost before then changing thier mind when it was in court; oh and finally explain the logic of a service charge which is paid before any other monies a customer may of out and is not optional as all banks have such charges they apply directly to the account.

Rollinghome

Nothing wrong with the aspiration, there are many savings and investment products that are needlesslly complicated. Anyone who thinks otherwise probably hasn't read, or doesn't understand, some of the T&Cs. The requirement to state the AER on savings products was a big step forward but was dismissed as unnecessary by many in the industry at the time.

But one reason that products, especially investment products, are complicated is because confusion marketing is so helpful for sales. So long as there's a willingness to believe that the product with brass knobs on that they don't fully understand is better than the simple one they do understand then Mr Hoban will have an uphill struggle.

Reaper

All savings accounts need is to make it manadory to say on your statements (online and paper) what interest rate it is earning and if it includes a bonus the date that it will end.

Why that is beyond them to enforce is beyond me!

However there are complicated structured investments (you know, the "Get your money back if the stock market falls and get half the growth if it rises" things) which are targeted at unsophisticated savers and have more catches than a Spanish trawler. Those could do with simplifying and having all the traps removed.

opinions4u

Reaper wrote: »

. Those could do with simplifying and having all the traps removed.

Remove the "traps" and you reduce the return to those who signed up knowing exactly what the product was about. That seems wrong to me.

Rollinghome

opinions4u wrote: »

Remove the "traps" and you reduce the return to those who signed up knowing exactly what the product was about. That seems wrong to me.

Hmm, so eager to profit from those who find them difficult to understand. I hope I'm never so hard up for a penny to make that necessary.

CLAPTON

the only really effective way of making ALL financial products simple, easy to understand for simple unsophisticated people is to basically have a simple state run monopoly
and ban all innovation in products and services

eg.
an instant access a/c paying 0.5% available only at POs as otherwise it would be unfair to people without internet access

maybe a term type a/c but one would have to make it very very simple to stop confusing competition ... paying say 0.75% with say 1 year but absolutely no way of early access otherwise it would be complicated and might discriminate against some-one somewhere

and why do we need any other a/cs?

trust the government to do the right thing by everyone.

JuicyJesus

Rollinghome wrote: »

Hmm, so eager to profit from those who find them difficult to understand. I hope I'm never so hard up for a penny to make that necessary.

If you don't fully understand something you want to buy, either get someone to explain it (e.g. an IFA) or don't buy one.

I don't think the concept of understanding a transaction you're part of is too far out, do you?

SnowMan

JuicyJesus wrote: »

I don't think the concept of understanding a transaction you're part of is too far out, do you?

You seem to be one of the people who Martin refers to in his latest blog , inserting your words into that leads to

‘if people are stupid enough not to understand a transaction it’s their own fault’

Kind of sad that people like you think this way if you ask me.

dunstonh

Vulnerable people should be protected. Indeed, the current FOS position is that they take a very dim view of a firm that has taken advantage of vulnerable person.

However, there is an increasing trend of people who are not vulnerable, who are probably lazy and know enough about what they are doing and but look to complain or go for compensation by making out they are vulnerable.

The lack of personal responsibility that exists in society today is not a good thing. If we keep dumbing down (which we have been) rather than teaching upwards, then there is really no hope for the long term.

JuicyJesus

SnowMan wrote: »

You seem to be one of the people who Martin refers to in his latest blog , inserting your words into that leads to

‘if people are stupid enough not to understand a transaction it’s their own fault’

Kind of sad that people like you think this way if you ask me.

If you don't understand a transaction you intend to make but push ahead with it anyway, then whose fault is it if that lack of understanding means you lose out? If you are given a document which contains details of how a product works but you don't read it, whose fault is it if you lose out as a result?

People shouldn't be lied to. But by the same token they shouldn't take out complex financial products when they don't understand how they work and don't want to ask anyone to explain them.